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Kerkorian sells 12 million GM shares

USATODAY.com
Kerkorian sells 12 million GM shares
Tuesday December 20, 9:04 pm ET

Investor Kirk Kerkorian said he sold 12 million of his General Motors (GM) shares, cutting his stake in the car company to 7.8% from 9.9%.

Kerkorian is an impatient, activist shareholder. His interest in GM has been seen as pressure on the automaker's executives to hasten a turnaround of the company. GM lost $3.8 billion the first three quarters this year.

Despite the sale, Kerkorian remains GM's third-largest shareholder.

In a filing with the Securities and Exchange Commission, Kerkorian's Tracinda investment company said it sold the GM shares at a loss to offset gains on unrelated investments and cut its tax bill.

The SEC filing said Tracinda sold 5 million GM shares at $22.02 on Thursday, and 7 million at $20.21 on Monday.

Tracinda acquired its shares in a number of transactions, paying an average $26.33 for 22 million of them, $31 for another 18 million. Tracinda didn't say how much it lost.

GM shares were $19.85 at the close of trading Tuesday on the New York Stock Exchange. That was down $1.20, or 5.7%. The stock fell to $19.63 earlier in the day, the lowest since 1987.

GM and Kerkorian had been discussing a seat for Kerkorian adviser Jerome York on the GM board of directors. Talks halted Dec. 9 because the sides "have not been able to reach a mutually satisfactory agreement," GM and Tracinda said then.

Tracinda spokeswoman Carrie Bloom said neither Kerkorian nor Tracinda would comment. Spokeswoman Toni Simonetti said GM had no comment.

The sale could reflect frustration over failing to win a board seat, according to Argus Research analyst Kevin Tynan. Kerkorian also might see little hope of a deal that would tap some of the value of GM's profit-making GMAC finance unit.

"His motivation was to unlock that equity in GMAC. Rumor has it that it's not going well," Tynan said.

The car company plans to cut 30,000 jobs and close nine assembly plants to overhaul its money-losing North American car and truck operations. But those cuts won't take effect immediately, and thus won't boost earnings soon.

GM's major supplier, Delphi, is in Chapter 11 bankruptcy. GM might have to bail it out to prevent Delphi's problems from disrupting GM production.

The report of Tracinda's share sale came the same day that Toyota Motor announced an aggressive production plan for next year that could boost it past GM as the world's No. 1 automaker. And the Tracinda filing followed by one day a report from J.D. Power and Associates that GM's market share plunged the first 11 days of December.

Kerkorian has shaken an automaker before. He offered $20.8 billion in 1995 for the 90% of Chrysler that he didn't own. That started a chain of events that ended with Chrysler and Daimler-Benz merging to become DaimlerChrysler.


LINK: http://biz.yahoo.com/usat/051220/13290764.html?.v=2